While the number of online shoppers in India is expected to go up to 3.80 crore by 2015 and e-commerce would grow to $24 billion, the last five years of e-retailing has adversely impacted some categories due to online retail preferences.
Brick and mortar retailers, which so far marketed books, music, gift articles, mobile phones, computer accessories and lifestyle products, have already been hit up to 100 per cent, and compelled even stores of major business houses to either down their shutters or reduce by half the space within modern retail format of these categories, Vishal Mehta, Founder and CEO, infibeam.com, told Business Line here.
Apparels, shoes and electronics stores could take the next big hit. The last one year has witnessed a 46 per cent increase in online sales of apparel, followed by consumer electronics. There has been a steep increase of 34 per cent and 25 per cent in shoes and accessories category shopping online, respectively.
When the retail revolution commenced in India after 2005, kirana shops were seen as probable victims. These small shops survived. And, with online shopping zooming now, instead of kirana shops, it is modern retail which is expected to shrink faster. The reason is that the cost of carrying inventory and tough competition by online price offers is likely to bleed them.
Mehta said modern retail would either reduce their inventory by 70 per cent, exit out of some categories, embrace online sales and make offline just a ‘fulfilment centre’.
Industry watchers predict that the expected launch of 4G services in a big way could be one big growth driver. With the deepening penetration of mobile telephony, m-commerce has already taken a huge leap, compared to the spread of Internet.
According to the statistics available, offline bookstores have seen their sales plummet by 90 per cent, followed by travel and ticket agents, gift, toys and flower sellers (80% each), consumer electronics and apparels (45% each), shoes (35%) and lifestyle accessories (25%). Even sale of music accessories has been hit by 25% as mobile phone manufacturers are launching devices inbuilt with digital music downloading application-based services, he said.
The maximum number of online shoppers comes from the tech-savvy youths between 18 and 35 years of age who daily spend hours on the Internet. Unlike in the credit card crazy West, however, they prefer to pay cash-on-delivery, or e-shop via net banking. But use of credit and debit cards is also on the rise.
Recently, Infibeam’s cloud-based enterprise platform BuildaBazaar has started offering ticketing solution services called INCEPT. It will cater to the need of concert, entertainment, park and travel firms and provide digital ticketing services along with physical infrastructure as per the client’s requirement.